The U.S. Federal Aviation Administration (FAA) said it wouldno longer directly manage routine inspection of design andmanufacturing. Instead, it would focus on overseeing aself-policing program executed by the manufacturers themselvesthrough more than 3,000 of their employees assigned to reviewsafety on behalf of the FAA.

These so-called designees had existed for decades, but theFAA had vetted and controlled them. Under the new system,companies chose and managed them, to the point where the FAAeven had trouble rejecting those they felt were unsuitable forthe job, according to one government watchdog.

As the drama of the overheating lithium-ion batteries on theBoeing 787 Dreamliner unfolds, that relationship is coming underintense scrutiny.

No evidence has surfaced that the designee system isresponsible for the battery problem that has prompted regulatorsto temporarily ban the plane from the skies. The story hasraised the question, however, whether the regulator hands overtoo much power to the industry.

"This is an occupation with a built-in conflict ofinterest," said Gordon Mandell, a retired FAA certificationengineer.

With Boeing doing about 95 percent of its own inspections,adds Mary Schiavo, former Department of Transportation inspectorgeneral, "it's kind of do-it-yourself." The situation was notunique to Boeing, she said. "There are places around the worldthat saw an FAA inspector once, maybe five years ago, and that'sit."

HOW WERE TESTS VERIFIED?

Boeing's new ultra-modern carbon-composite jet has beengrounded around the world for six weeks as the NationalTransportation Safety Board leads an investigation into twobattery incidents, joined by the FAA. Both agencies are alsolooking into the 787 certification process.

"We need to understand what tests were done and who wascertifying those tests, and again how they were verified - notjust by Boeing, but by the regulator as well," NTSB ChairmanDeborah Hersman said on Feb. 8, referring to the battery andother key parts made in a long, global supply chain.

At the broadest level, even some supporters of the designeeprocess are asking whether the FAA is up to the task ofeffectively overseeing the system.

Among them is Ken Mead, another former DOT inspector generaland a veteran of investigating the FAA. "The questions I'd wantanswers to are: Does the FAA have the right people with theright expertise to make sure the FAA is in a position tocritically second-guess? And have they critically reviewed theapproval process so this does not happen again?" he said.

The FAA's defense of its abilities and approach isunwavering. "Some have asked the question whether the FAA hasthe expertise needed to oversee the Dreamliner's cutting edgetechnology. The answer is yes, we have the ability to establishrigorous safety standards and to make sure that aircraft meetthem," FAA Administrator Michael Huerta said in an industryspeech on Jan. 23. "The way to enhance safety is to keep thelines of communication open between business and government."

The FAA and Boeing both say the FAA is better off managingthe system and picking out high-risk areas on which toconcentrate. It lacks the resources to manage every individualand inspect every part, they say, and industry has a strongincentive to cooperate - unsafe products jeopardize business.They point out that FAA staff invested more than 200,000 hoursover eight years certifying the 787 on top of work done bydesignees.

Perhaps their biggest defense is that there have been nofatal crashes of scheduled commercial flights in the UnitedStates for four years.

BIG JOB, NOT-SO-BIG BUDGET

The FAA's inability to expand its budget in line with anincreasingly large, complex and global aviation industry playeda major role in the 2005 decision to expand the delegationsystem. Certification work increased fivefold between the 1940sand 1990s and has only become more complex since.

"By shifting our inspection focus from reviewing testresults to overseeing the designation program, we will be ableto more efficiently use our resources while extending ouroversight coverage, thereby increasing safety," the FAA said inthe official announcement of the program, printed in the FederalRegister on Oct. 13, 2005.

It added, however, that "More than one commenter states thatthe FAA should be hiring more inspectors, not spending itslimited resources creating an organizational designee system."Public comments from opponents of the new system outnumberedsupporters 14 to 11, it noted.